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Innovative technologies KEY TAKEAWAYS Policymakers need new solutions to harness innovation Industries can benefit from being disrupted by new technologies An internet cafe in Guilin, China Growth through innovation Policymakers can utilise the new industrial revolution to promote entrepreneurialism and new ecosystems, writes Angel Gurría Our global economy is beset by financial vulnerability, slowing productivity, environmental degradation and rising inequalities. Many countries have stagnating or declining populations and face diminishing returns from labour inputs and investment in physical capital. Policymakers need new solutions that harness opportunities through innovation. Boosting productivity Innovation takes many forms, such as new and better products and production processes, new marketing methods and changes in business practices and better workplace organisation. It underpinned about one-third of total growth in gross domestic product between 1995 and 2013 by boosting productivity and it will be tomorrow's driving force behind economic growth and societal progress. 100 G20 China: The Hangzhou Summit • September 2016 G7G20.com
Innovative technologies The OECD will bring hard data, evidence and analysis to the G20 debates Adult populations who use the internet every day... Angel Gurría 90% …in Norway… 50% …and in China DBIMAGES/ALAMY This will not happen without decisive action, though. The current productivity slowdown reflects a breakdown in the ‘innovation diffusion machine’. We are not running out of ideas. Rather, ideas are not spreading more widely enough within and across countries. Science and technology are highly concentrated. Only 2,000 companies account for more than 90% of global spending on business research and development, while a handful of countries dominate patent filings in emerging technologies. Start-up rates have fallen in many countries, but young firms are crucial for introducing game-changing innovations. Advancing through disruption Digitalisation and the internet underpin the current buzz about innovation and highlight the challenges faced by policymakers. Data and its analysis are driving advances in automation, robotics and artificial intelligence, which are at the core of the next industrial revolution. The use of digital technologies is becoming ubiquitous – 80% of citizens in the members of the OECD have broadband subscriptions and more than three billion people now use the internet. Self-driving vehicles are already on our roads and digital innovation is revolutionising health, education and other public systems. These benefits go hand in hand with disruptions. Digitalisation transforms how we interact with one another and with society more broadly. It changes the nature and structure of organisations and the profile of jobs, evidenced by the rise of platforms for online services and asset sharing. There are also concerns about digital divides. Almost 90% of adults aged 16 to 74 in Norway use the internet every day. In China it is less than 50%. We have to tackle important issues relating to privacy, security, social protection and skills, and inclusion. Policymakers have good options for creating eco-systems for innovation that Secretary General OECD Angel Gurría has been Secretary General of the Organisation for Economic Co-operation and Development (OECD) since 2006, having been reappointed in 2010. He served as Mexico’s Minister of Foreign Affairs from 1994 to 1998 and Minister of Finance and Public Credit from 1998 to 2000. Gurría has participated in various international organisations, including the Population Council and the Center for Global Development. He chaired the International Task Force on Financing Water for All and was a member of the United Nations Secretary General’s Advisory Board on Water and Sanitation. @OECD www.oecd.org encourage entrepreneurialism, while also dealing with the social consequences. Recent OECD work highlights the ‘Productivity-Inclusiveness Nexus’ and the related importance of combining policy reforms – aimed at strengthening regulation, competition and innovation – with policies that provide the opportunity for everyone to share in their benefits. Countries need to invest in health, education, skills and social protection, measures that help the most vulnerable in our societies. Effective skills strategies, open and competitive business environments, efficient systems of knowledge creation and diffusion and sound governance are all essential. They must keep pace with the changes in our economies, so that growth is inclusive. Promoting the innovation agenda The G20 has taken up this challenge under the leadership and vision of China’s 2016 presidency promoting the leitmotiv of an ‘Innovative, Invigorated, Interconnected and Inclusive World Economy’. It is designing a ‘Blueprint for Innovative Long- Term Growth’ to unleash the potential of innovation, grasp the opportunities offered by the digital economy and reap the benefits of the next industrial revolution. The OECD has been honoured to support the Chinese innovation agenda by bringing hard data, evidence and analysis to the debates, especially on defining innovation and measuring the extent of the digital economy. The OECD has a clear mandate to continue our work to help policymakers harness innovation for the benefit of all society. The Daejeon and Cancun declarations resulting from our 2015 and 2016 ministerial-level meetings on science, technology, innovation and the digital economy provide our vision. The OECD, in promoting better policies for better lives, will continue to support the G20 as it strives to realise new sources of innovation, growth and well-being. G20 G7G20.com September 2016 • G20 China: The Hangzhou Summit 101
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G20 Research Group September 2016 G
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Welcome from the President WELCOME
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